Solar power having day in the sun

In this Sept. 14, 2011 photo, Tim Johnson poses for a portrait with solar panels on his roof in Philadelphia. Since March, he has generated 50 percent to 75 percent of his electricity with a set of solar panels on his roof, saving 20 percent on his electricity bills. More solar energy is being planned in the U.S. than any other power source, including nuclear, coal, natural gas and wind. (AP Photo/Matt Rourke)

Associated Press

NEW YORK — Solar energy may finally get its day in the sun.

The high costs that for years made it impractical as a mainstream source of energy are plummeting. Real estate companies are racing to install solar panels on office buildings. Utilities are erecting large solar panel "farms" near big cities and in desolate deserts. And creative financing plans are making solar more realistic than ever for homes.

Solar power installations doubled in the United States last year and are expected to double again this year. More solar energy is being planned than any other power source, including nuclear, coal, natural gas and wind.

"We are at the beginning of a turning point," says Andrew Beebe, who runs global sales for Suntech Power, a manufacturer of solar panels.

Solar's share of the power business remains tiny. But its promise is great. The sun splashes more clean energy on the planet in one hour than humans use in a year, and daytime is when power is needed most. And solar panels can be installed near where people use power, reducing or eliminating the costs of moving power through a grid.

Solar power has been held back by costs. It's still about three times more expensive than electricity produced by natural gas, according to estimates by the Energy Information Administration.

But the financial barriers are falling fast. Solar panel prices have plunged by two-thirds since 2008, making it easier for installers to market solar's financial benefits, and not simply its environmental ones. Homeowners who want to go solar can do so for free and pay the same or less for their power.

Last month two of the nation's biggest utilities, Exelon and NextEra Energy, each acquired a large California solar power farm in the early stages of development. Another utility, NRG Energy, has announced a plan with Bank of America and the real estate firm Prologis to spend $1.4 billion to install solar systems on 750 commercial rooftops.

Nationwide, solar power installations grew by 102 percent from 2009 to 2010, by far the fastest rate in the past five years.

"Every manufacturer globally is looking around for the next major growth market, and the U.S. is the first one everyone points to," says Shayle Kann, managing director for solar research at GTM Research.

Making solar affordable still requires large tax breaks and other subsidies from federal and state governments. The main federal subsidy pays for 30 percent of the cost of a residential system. When state and other subsidies are added, as much as 75 percent of the cost can be covered.

But prices of solar panels, the squares of crystalline silicon or thin layers of metal films that turn the sun's rays into electricity, are falling so fast that its advocates now credibly claim that solar will be able to compete with fossil fuels even when the federal solar subsidy shrinks by two-thirds in 2016.

"Over the past 10 years the industry has made the case that we needed to increase scale so we could reduce prices," says Arno Harris, CEO of solar developer Recurrent Energy, a subsidiary of Sharp Corp. "We're seeing it happen."

The falling prices have made it easier for solar installers to raise the money needed to grow. And they've made solar power systems so affordable they can appeal to homeowners who want to save on their electric bill, not just reduce their environmental impact.

Tim Johnson, a high school math teacher in Philadelphia, had wanted to put solar panels on his roof for years. Like many people concerned about the environment, the thought of powering his home without burning fossil fuels had a strong appeal. But with two kids in college, he couldn't justify spending $15,000, after subsidies, to do it.

Popular Comments

"Making solar affordable still requires large tax breaks and other
subsidies from federal and state governments. The main federal subsidy pays for
30 percent of the cost of a residential system. When state and other subsidies
are added, as much
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6:52 a.m. Oct. 24, 2011

Top comment

Screwdriver

Casa Grande, AZ

I have solar panels on my home. I've calulated thier cost to be .06 cents a
Killowatt hour over 30 years. They may last longer but the warranty is 25.

My electric bill used to come out to .14 cents a killowatt hour for
electricity from
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8:13 a.m. Oct. 24, 2011

Top comment

Mountanman

Hayden, ID

I hope solar energy has a bright future but that future seems to be distant for
many reasons, mostly economic factors, as this excellent article points out.
What it does not point out is the heavy federal and state taxes we pay on every
gallon of
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